In standard costing, an 'Adverse Variance' occurs when: MCQ with Answer and Explanation

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In standard costing, an 'Adverse Variance' occurs when:

A. Standard quantity equals actual quantity

B. Actual profit is greater than budgeted profit

C. Actual cost is less than standard cost

D. Actual cost is greater than standard cost

Answer: Option D

Solution (By JKSSB Mock Tests)

When the actual expenses exceed the predetermined standard cost, it negatively impacts profits, termed an adverse/unfavorable variance.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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